M&A

11 November, 2009

UPDATE 1-Woolworths-Lowe's Australia plan wins final approval

* Joint venture already has 96 pct control over Danks

* Danks shares up 4.6 pct, Woolworths down 1 pct (Adds Woolworths comment)

MELBOURNE, Nov 11 (Reuters) - Woolworths Ltd (WOW.AX) and U.S. No.2 home improvement chain Lowe's (LOW.N) won final approval on Wednesday to jointly set up big hardware stores in Australia, taking over a domestic wholesaler as their supplier.

Australia's competition regulator cleared their joint takeover of hardware wholesaler Danks Holdings Ltd (DKS.AX), a key plank in Woolworths' expansion into $20 billion hardware market to spur growth as its market-leading supermarkets' growth slows.

The Australian Competition and Consumer Commission said it allowed the takeover to go ahead after Woolworths and Lowe's Companies Inc promised not to discriminate against smaller hardware retailer customers supplied by Danks.

"With these undertakings in place, the ACCC considers the proposed acquisition unlikely to result in a substantial lessening of competition," commission Chairman Graeme Samuel said in a statement.

Woolworths said the joint venture would give shoppers more choice and better prices in hardware and home improvement market, dominated by conglomerate Wesfarmers Ltd's (WES.AX) Bunnings chain with an 18 percent market share.

Woolworths and Lowe's, buying Danks for A$88 million ($82 million), have already won control over 96 percent of Danks' shares.

Danks shares jumped 4.6 percent to A$13.49, just below the A$13.50 offer price, after the commission's decision. Woolworths shares were down 1 percent, against a 0.5 percent rise in the broader market. ($1=1.077 Australian Dollar) (Reporting by Sonali Paul; Editing by Denny Thomas)

Source: http://www.reuters.com